Golf balls, cologne and car accessories are great gifts for Father’s Day, but what your dad really wants is to know that you were listening when he talked to you about money and responsibility. If he counted out your weekly allowance like every dollar was another child he was giving away, seeing you stand on sound financial footing will be his naptime dream come true!
This year, on Sunday, June 20, we celebrate the man who taught us everything we need to know. Along with neckties and power tools, you can give him peace of mind and show him you are following in his footsteps as a great provider by setting up an estate plan that will provide for your own family after you pass away.
How to Get Started
Your first step is to reach out to an experienced Florida estate planning attorney. Married and single parents will have slightly different concerns, but the basics cover both. Here is a list of documents that most commonly comprise any good estate plan:
1. A Will
A Last Will and Testament (“Will”) is an important estate-planning document that, although losing in popularity to a Living Trust, can still provide crucial financial organization.
- Wills are used to designate who should receive your assets upon your death. The people or charities you designate are called beneficiaries.
- Wills allow you to appoint someone to become “Personal Representative” of your estate. This person will be responsible for carrying out your last wishes according to what you wrote in the Will.
- If you have minor children, you can appoint a Guardian(s) who will care for them in case of your death. This reduces lawsuits that arise over custody in cases of sudden or unexpected death.
- The downside to having just a Will is that upon your passing, your family still needs to go through a court-supervised probate process to receive your assets. Contact us for a consultation on how probate works in Florida.
2. A Living Trust
A Living Trust (also known as a Revocable Trust) is a primary estate-planning tool that is used in place of a Last Will and Testament (“Will”). Trusts used to be for the Trumps and Rockefellers of the world, but today, anybody that owns real estate absolutely needs a Revocable Trust. Here is the nitty gritty:
- Trusts are used to by-pass probate. This means that upon your death, all assets in the Trust pass to the beneficiaries through the Trust, and not through any court process.
- If you own real estate in your own name, then you DEFINTELY need a Trust. Contact us for a consultation on why this is the case.
- Trusts can provide your beneficiaries with asset protection.
- Trusts are fully revocable: the creator can change any terms or completely revoke the Trust.
- Trusts are private documents that unlike Wills do not become a part of the public record.
3. Durable Power of Attorney
Imagine you become ill and are confined to your home or suffer an accident and must remain in a hospital for an extended period of time. Who will handle your financial matters, such as paying your bills, visiting your bank, renewing insurance policies, etc.? This is where a Power of Attorney comes into play as one of the most important documents you will ever sign.
The most common Power of Attorney is the Durable Power of Attorney. This is a crucial legal document that functions while you are alive and allows you to select a person (the “agent”) to “step into your shoes” in case of your sudden mental or physical incapacity. The agent will be able to make legal and financial decisions and conduct transactions on your behalf. The Power of Attorney document ends when a person passes away. Note that if you created this document prior to October of 2011, it is time to update it as the laws in Florida have changed.
4. Health Care Surrogate & Living Will
This document used to be an afterthought, but the global pandemic has certainly put a spotlight on it. A Health Care Surrogate, also known as a Health Care Proxy or Health Care Directive, allows you to plan for difficult medical decisions. It allows you to name someone (the “agent”) that will make health care decisions for you in case you are unable to make them yourself. This prevents disagreements within the family as to who should make these critical decisions. Such decisions include consenting to certain medical procedures, seeking a second opinion, obtaining medical records, or transferring you to a different medical facility.
If you do not prepare a Health Care Surrogate document, and you fall ill and cannot make your own medical decisions, then the healthcare facility will follow Florida law to determine who is responsible for your healthcare decisions.
A Living Will allows you to state your wishes about your end-of-life medical care. This allows your health care surrogate to best carry out your health care wishes regarding life sustaining procedures. Living Wills include a set of legal instructions about the treatment you wish to receive. You can revoke or revise a valid Living Will at any time.
Estate Planning Tips for Single Parents with Minor Children
Even if the other parent is still alive, planning for your children’s future is a weightier matter than if you were married. Here are some of the important questions to ask:
1. Who Will Take Care of Your Children When You Are Gone?
Suppose you die or you are physical and mentally incapacitated to take care of your children. By Florida law, the other parents who is healthy, willing, and able, gets priority over all childcare decisions including custody and living arrangements. On the other hand, what if the other parent will not be involved with your children? In that case, you need to have clear legal documents prepared (in advance) that will indicate who the temporary and permanent guardians of your children should be. Your children would then be under the care of the guardian you nominate until you recover or in case of your death, until they reach 18 years of age.
2. Do You Need a Will or a Trust? What’s the Difference?
The Will is a legal document that coordinates the distribution of your assets after death. If you have a Will and it says that your children are the beneficiaries, it will still go through a court-supervised process, called probate and, if the children are minors (under 18 years of age), they will require an additional court-supervised process called guardianship, in which a Judge oversees your children’s inheritance until they are 18.
Conversely, a Trust, also called as “living trust” or “revocable living trust” resolves that problem. A Trust is a legal document where you place all your assets, like real estate properties, savings accounts, etc., so you can continue to control your assets while you are alive; but when you die the Trustee, who will act on the behalf of your trust, will start managing it for the benefit of your children. The Trustee is allowed to hire financial planners and attorneys to help act on your behalf. This includes paying bills, liquidation of properties, renting or keeping a property for the children with their guardian, re-investing the cash, etc. Trusts, if properly signed and funded, completely avoid the probate process. Trusts need to be done through an estate planning attorney and should not be attempted on LegalZoom or on your own.
3. How Should You Distribute Your Assets?
One of the most common mistakes that parents make is distributing assets to their children too early. A good plan is to distribute it at various ages – for example, from ages 25 to 30 to 35 – which could help to make them more responsible while they wait to inherit.
But the biggest mistake is to DO NOTHING, leaving your assets in an uncertain future and, the worst thing, leaving your children’s inheritance out of your control.
An attorney who specializes in estate planning can help you through each of the steps. Our stellar Google reviews clearly show that we can help in any family situation. Estate planning is not glamorous or fun, but you know what your dad would say: Neither is the poorhouse.
You can turn make dad’s wisdom into an estate plan that will provide peace of mind for the entire family. For a free personalized consultation, contact OC Estate and Elder Law at (954)251-0332 or firstname.lastname@example.org today. Our attorneys are fluent in English, Spanish and Russian.